UNIDO Approach in Social Cost Benefit Analysis
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Questions and Answers

What does the term 'numeraire' refer to in shadow pricing?

  • The unit of account where values of inputs and outputs are expressed (correct)
  • The willingness of consumers to pay for a project
  • The taxes imposed on tradable goods
  • The total consumption of the economy

    • In the context of tradability, when is a good/service considered non-tradable?

  • When it is fully traded with no trade barriers
  • When its export price is more than its domestic cost of production
  • When it is actually traded due to domestic industry capacity
  • When its import price is less than its domestic cost of production (correct)

    • According to the UNIDO approach, what should be considered when calculating shadow prices related to taxes?

  • Taxes should be included when a project diverts non-traded inputs or adds to non-traded consumer goods (correct)
  • Taxes should always be included regardless of the project's impact on the economy
  • Taxes should be excluded when a project increases domestic production by other producers
  • Taxes should be excluded for fully traded goods

    • What source does the UNIDO approach suggest for determining shadow pricing based on the impact of a project on the national economy?

    <p>Increase or decrease in total consumption or production in the economy</p> Signup and view all the answers

    Why are governments of developing countries concerned about the impact of projects on savings and their value?

    <p>Most developing countries face scarcity of capital</p> Signup and view all the answers

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